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Poland Company formation and Registration













Limited Liability Company:


Polish LLC is the most common form of doing business in Poland by foreigners. Limited Liablity Company may be established for any purpose allowed by law.

Essence:


A limited liability company is a legal entity with a separate legal personality from its shareholders. As a result the shareholders are not liable for the company’s obligations.
In case of negligence members of The Board of Directors can be held liable for the company’s obligations.


Polish Company (LLC) with foreign capital.


EU nationals can establish and run a company free of any restrictions.
Non EU nationals can also freely establish and run Polish company, however in some matter they are up to restrictions provided by law.
For example Polish LLC with more then 50 % of Non EU capital can purchase a real property in Poland only after obtaining permission form the Ministry of Foreign Affairs (or Ministry of Agriculture in case of agricultural properties).


Share capital


Minimum share capital of LLC company is 5.000 PLN (approx. 1250 EUR).
The share capital has to be covered by contributions, which can be made in money or transferring ownership of the property (movable or immovable).
As opposed to Business Partnership in LLC a contribution cannot be made in the form of services towards the company.


Representation


Polish LLC Company is represented by the Board of Directors.
The Board shall consist at least of one person. Rules of representation can be freely formed in the Articles of Association.
A company may be also represented by regular proxy (pelnomocnik) or a registered proxy (prokurent).


General Shareholders Meeting and Supervisory Board


Superior authority of a company is General Shareholders Meeting.
A Supervisory Board may be optionally appointed.
In limited liability companies whose initial capital exceeds PLN 500.000 (approx. 125.000 EUR) and the number of shareholders exceeds twenty five the Supervisory Board or audit commission shall be compulsory.


Taxes


As the Polish LLC is a separate legal entity it taxed by Corporate Income Tax (CIT).
?CIT is imposed on the total income from all sources (reduced by deductions) at the rate of 19%.?Dividends released by the LLC are taxed separately.

If dividends are released to shareholders who are private individuals they are generally taxed by withholding tax of 19 %.
However dividends released to foreigners (tax residents in other countries) are tax in accordance with appropriate DTT (Double Taxation Treaty).

If they paid by resident subsidiaries to parent companies they may be exempt from Polish CIT tax if parent company owns at least 15 % of the subsidiary’s share capital continuously for at least 2 years and being subjected to unlimited income tax liability in Poland, other EU Member State or other state belonging to EEA.



Liability


The shareholders are not liable for the company’s obligations, they bear a risk up to the value of shares contributed.

The board of directors. Where public enforcement of debts against the company has proved ineffectiveness the members of the management board shall be liable jointly and severally for the obligations of the company.
A member of the management board may extricate himself from the liability by proving that a petition for bankruptcy was filed in due time, or that a failure to file a petition for bankruptcy was late due to his fault or that the creditor suffered no damage even though no petition for bankruptcy was filed or no arrangement proceedings were instituted.


Steps necessary to incorporate a company (LLC):


1. Drafting Articles of Association
2. Executing a deed in the office of Notary Public
3. Registration of the company at the Company Register (KRS)
As a result you of above steps you would get:
1. The company will be registered in the Company House (KRS) and will get it KRS no.
2. The company will get tax identification no. (NIP) and will be registered as a taxpayer
3. The company will get its own statistical no. (REGON)
The company would be registered in Social Security Agency (ZUS)


Joint Stock Company:


Polish S.A. (Spolka Akcyjna) is form of doing business in Poland by foreigners.
Limited Liablity Company may be established for any purpose allowed by law.


Essence:


A Joint-stock company is a legal entity with a separate legal personality from its stockholders.

Polish Company (S.A.) with foreign capital.


EU nationals can establish and run a company free of any restrictions.
Non-EU nationals can also freely establish and run Polish company, however in some matter they are up to restrictions provided by law.
For example Polish Joint-stock Company (S.A.) with more then 50 % of Non-EU capital may purchase a real property in Poland only after obtaining permission form the Ministry of Foreign Affairs (or Ministry of Agriculture in case of agricultural properties).


Stock capital.


Minimum stock capital of Joint-stock Company is 50.000 PLN (approx. 12.500 EUR).
The stock capital has to be covered by contributions, which can be made in money or transfering ownership of the property (movable or immovable).
Contribution cannot be made in the form of services towards the company.


Representation.


Polish Joint Stock Company is represented by a the Board Directors.
The Board shall consist at least of one person. Rules of representation can be freely formed in the Articles of Association of the Company.
A company may be also represented by regular proxy (pe?nomocnik) or a registered proxy (prokurent).


General Stockholders Meeting and Supervisory Board.


Superior authority of a company is General Stockholders Meeting. A Supervisory Board must be compulsory formed.

Taxes.


As the Polish Joint-stock company as a separate legal entity it is taxed by Corporate Income Tax (CIT).
?CIT is imposed on the total income from all sources (reduced by deductions) at the rate of 19%.
?Dividends released by the company are taxed separately.

If dividends are released to stockholders who are private individuals they are generally taxed by withholding tax of 19 %.
However dividends released to foreigners (tax residents in other countries) are tax in accordance with appropriate DTT (Double Taxation Treaty).

If they paid by resident subsidiaries to parent companies they may be exempt from Polish CIT tax if parent company owns at least 15 % of the subsidiary’s share capital continuously for at least 2 years and being subjected to unlimited income tax liability in Poland, other EU Member State or other state belonging to EEA.



Liability


The stockholders are not liable for the company’s obligations, they bear a risk up to the value of stock contributed.

Steps necessary to incorporate a company (LLC):


4. Drafting Articles of Association
5. Executing a deed in the office of Notary Public
6. Registration of the company at the Company Register (KRS)
As a result you of above steps you would get:

4. The company will be registered in the Company House (KRS) and will get it KRS no.
5. The company will get tax identification no. (NIP) and will be registered as a taxpayer
6. The company will get its own statistical no. (REGON)
7. The company would be registered in Social Security Agency (ZUS)


Article by: Dudkowiak & Kopec Business Lawyers
www.dudkowiak.com

Michal Dudkowiak is a Barrister-at-Law, Partner at Dudkowiak & Kopec, lecturer and a Ph.Dc researcher at the Commercial Department of Adam Mickiewicz University in Poznan. Micha? Dudkowiak obtained his master's degree from the Faculty of Law at Adam Mickiewicz University and a diploma in British and European Law at the University of Cambridge. He is a member of Polish Legislation Society, Bar Council in Wielkopolskie voivodship and a member of European Criminal Bar Association in London.












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